Estate recovery is the process by which a state recoups expenses paid for long term care following the death of a Medicaid recipient. Since 2011, Michigan has been enforcing its estate recovery law often with devastating consequences – particularly for those who are unprepared. Far too often, families of Medicaid recipients are blindsided by the notice that their loved one’s estate will be wiped out by the State’s estate recovery claim. To protect your loved ones, there are several matters you should be aware of:
1. Who is subject to estate recovery? Medicaid beneficiaries age 55 or older who received long term care services after September 30, 2007.
2. How far back can the State seek collection? Recovery can be made for long term care services received beginning on or after July 1, 2010.
3. What assets are subject to estate recovery? Only probate assets are subject to estate recovery.
4. Is a surviving spouse at risk? Estate recovery cannot occur if the surviving spouse continues to reside in the home.
5. Will a lien be filed against the home? The State of Michigan will not file a lien (i.e. a charge upon property filed with the Register of Deeds) against the home or other probate assets. A claim, however, will be made to the personal representative under the probate estate or the decedent’s heirs for the amount of Medicaid services paid by the State.
6. Will I be notified of the amount owed? The State of Michigan will send a letter regarding the amount owed.
7. What if the home isn’t worth very much? If the home is of “modest value” then the estate recovery statute provides that the home will be exempt from estate recovery. Unfortunately, however, this exemption has been applied differently than the statutory language with additional requirements required by the State of Michigan. To have any claim under this exemption, you must file an application for a hardship waiver within 60 days of receipt of the notice against the estate.
8. How can I protect my assets? A life estate deed that allows your home to pass to your loved ones outside of probate court will protect your home from estate recovery.
Like it or not, estate recovery is here to stay. Thankfully, a loved one’s assets can be protected even after the receipt of Medicaid benefits by making sure probate administration will not be required following the loved one’s death. To make sure your loved one is protected, be sure to consult with an experienced elder law attorney.
This blog post is written by Brett A. Howell, Certified Elder Law Attorney. The blog is written as a service of The Elder and Estate Planning Law Firm, P.L.L.C. This information is for general informational purposes only and does not constitute legal advice. For a consultation to address specific questions, please call (810) 953-3846.